Through The Smokescreen, This Side Up

Indian Connections

• Thousands rendered jobless in Bangladesh after Lilliput Kidswear fails to pay $4 million to factories
• Rana Plaza housed a unit, New Wave, that was outsourced work by an Indian supplier of Benetton
• Tung Hai Sweater Ltd, where a fire killed eight, produced garments for Indian buyers
• As imports from Bangladesh rise, Indian buyers are being asked to ensure they or their partners don’t abuse workers’ rights
• India imported $57.51 million worth of garments from Bangladesh between July 2012-March 2013

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Jamal Hossain, owner of a garment factory in Dhaka, was a pleased man when he bagged repeated orders worth several hundreds of thousands of dollars from Indian kidswear retail giant Lilliput. He had been paid around $600,000 between 2010 and 2011. That dream run soured in September 2011 when Lilliput, because of poor fiscal management, failed to pay $277,000 for the winterwear Jamal’s workers had stitched. “This has completely destroyed my business,” says an angry Jamal. “Given this liability, no bank is now willing to support me. Those workers who have not found jobs elsewhere are just sitting at home.”

In a crisis precipitated by Lilliput, Jamal is one of several factory owners in Bangladesh whom the Indian firm owe around $5 million. Shahidullah Azim, vice-president of Ban­gladesh Garments Man­ufacturers and Exp­orters Association (BGMEA), told Outlook that as many as 22 factories have been affected by the non-payment of dues in the past two months, and around 30,000 had lost their jobs. It has bec­ome a bilateral issue too. Outlook made several unsuccessful attempts to speak with repre­s­en­tatives from Lilliput. However, reports have quoted its founder Sanjeev Narula as saying that he hopes to clear his dues by mid-June.

The Lilliput affair may be just one of many worrying stories involving Indian garment buyers in Bangladesh. After the recent Rana Plaza building collapse, which killed 1,127, there is concern that Indian buyers, focused on cutting margins, could well be turning a blind eye to the many ills of the garment industry there. Even Rana Plaza, it now turns out, had at least one India connection. One of the establishments there—New Wave—had been outsourced a contract by an Indian supplier of Benetton. Chief executive Biagio Chiarolanza disclosed this in an interview to Huffington Post to address growing concerns after clothes with the firm’s label were found at the collapsed site.

When Outlook contacted BGMEA for names of factories supplying garments to Indian buyers, it sent a list of 19 names. One of them happened to be Tung Hai Sweater Ltd. This is where a fire killed eight on May 8, including its owner, who happened to be one of the BGMEA directors, less than fortnight after the Rana Plaza tragedy. While safety standards were relatively better at this unit, the dead were retrieved from the stairwell, where they suffocated from fumes from burning acrylic fabric. This raised concerns about poor structural designs that make stairwells ‘chimneys instead of lifelines’. Some have even alleged the unit had no working sprinklers or exterior fire escapes.

Given these incidents, and probably more unreported ones, can Indian buyers be abs­olved of the charge of exploiting Bangladeshi labour? The big draw for them is low salaries—a third of average salaries in India. However, some like Gurvinder Singh, operations director of Rattha Overseas, Chennai, which works with 15 Ban­gladeshi factories to export clothes to the West, thinks of it as a “lot of manpower”. “If you set up a factory in India, you will not find workers,” he says, pointing to the lack of trained people.

Rashidul Alam ‘Raju’, general secretary of Bangladesh Ind­ependent Garment Workers Union Fede­ration, thinks Indian buyers must engage renowned factories to ensure that they are not unwittingly a party to the abuse of workers’ rights. “One cannot just focus on profits, you have to do so on compliance too,” Rashidul says. With garment imports from Bangladesh growing at over 30 per cent, buyers here can hardly afford to have their fabrics dyed with blood.